A bill to amend the Internal Revenue Code of 1954 to provide that certain trusts may be shareholders of subchapter S corporations.

Summary

Amends the Internal Revenue Code to permit qualified subchapter S trusts to be shareholders of subchapter S corporations. Treats the beneficiary of such a trust as its owner. Defines "qualified subchapter S trust" as a trust which meets the following requirements: (1) the sole income beneficiary is a U.S. citizen or resident under a disability for purposes of eligibility for Old Age, Survivors and Disability Insurance benefits; (2) the beneficiary is the sole recipient of trust corpus or income; (3) the trust terminates at the death of the beneficiary; (4) at least 90 percent of the value of contributions to the trust consists of stock in one subchapter S corporation; (5) all of the contributions are includible in the gross estate of the grantor and pass to the trust at the grantor's death; and (6) the beneficiary or a legal representative has irrevocably elected that the beneficiary shall be treated as the owner of the trust. Terminates the status of a qualified subchapter S trust at any time during which the trust owns no subchapter S corporation stock or the corporation ceases to qualify as such.

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1 official file

• Introduced in House

  summary · EN · 29 January 1981

  Open at official source

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